nLIGHT shares plunge on $175M equity offering at 12% discount
Dilution concerns mount as laser technology company prices stock sale below market value
nLIGHT Inc shares tumbled in after-hours trading after the laser technology manufacturer announced a $175 million public offering priced at a steep discount to Monday's closing price, creating dilution pressure for existing shareholders.
The Vancouver, Washington-based company priced 3.98 million shares at $44.00 per share, representing a 12% discount to its closing price of $49.98. The offering generates approximately $175 million in gross proceeds and creates 7.8% dilution for current shareholders, with underwriters granted a 30-day option to purchase an additional 596,590 shares that could further expand the share count.
The announcement comes as nLIGHT's stock has been on a remarkable run, surging from a 52-week low of $6.20 to recent highs above $49, driven by growing excitement around the company's position in the directed energy weapons market. The stock had gained nearly 4% in regular trading on Monday before the after-hours announcement.
"This is a significant raise that clearly signals management's intention to aggressively expand capacity and position the company for the growing directed energy opportunity," said analysts who follow the stock. "However, pricing at a double-digit discount suggests urgency to access capital, and the dilution will pressure near-term earnings per share."
nLIGHT plans to use the net proceeds for working capital, capital expenditures, and general corporate purposes. The timing aligns with the company's recent expansion of high-energy laser manufacturing capacity in Longmont, Colorado, which more than doubled its existing space in January to support growing demand from the U.S. Department of Defense and other agencies.
The equity raise follows a period of growing analyst enthusiasm for nLIGHT's role as a pure-play provider of directed energy lasers. Roth MKM initiated coverage in December with a Buy rating and $44 price target, before raising that target to $55 in early February. The firm highlighted nLIGHT's vertically integrated manufacturing approach and its position in the HELSI 2 megawatt-scale laser weapon program, a three-year project valued at $171 million.
The company's high-power fiber lasers are considered critical for directed energy applications, including counter-unmanned aerial systems, counter-rocket, artillery, and mortar missions, and counter-missile operations across multiple domains. nLIGHT is scheduled to showcase its 70kW-class Laser Weapon System alongside its 30kW and 10kW High-Energy Lasers at the World Defense Show in Riyadh, Saudi Arabia, later this week.
Despite the long-term potential in directed energy, the immediate market reaction reflects investor sensitivity to dilution in a stock that has already appreciated more than 700% from its 52-week lows. With 88.3% of shares held by institutional investors, the offering represents a meaningful expansion of the company's market capitalization, which stood at $2.32 billion before the announcement.
nLIGHT's financial metrics show a company in transition, with trailing twelve-month revenue of $227.5 million and negative earnings per share of $0.86. However, analysts expect the company to report positive earnings per share of $0.04 in 2025, improving to $0.05 in 2026, signaling a fundamental turnaround that the new capital aims to accelerate.
The offering is being led by Stifel, Baird, William Blair, and Raymond James as joint book-running managers, with expected closing on February 5.